Expanding business into a new location is risky. It's also the second leading cause of contractors going out of business. Expanding is not a question of whether or not you can build similar products in a new location. It's a question of whether or not you can make a profit at it.

WORK IS DIFFERENT IN NEW LOCATIONS

The differences in customs, methods, procedures, regulations, and labor conditions can be costly if they aren't planned for. Compounding the problem, contractors often take a distant project that's also much larger than past jobs because it wouldn't pay to take normal-sized projects. That can be a double-whammy without good planning.

EXPANDING SAFELY TAKES PLANNING

The safest way to expand geographically is to start from the edges of your existing work area. You can test your profitability as you go and find your limits.

HOW TO START A REGIONAL OFFICE

There's nothing wrong with regional offices in a construction business, but there is risk in starting one. Contractors forget how much energy, night work, and worry went into developing a successful operation. Then they put untested people with little backup in a regional office and expect profitable construction. A regional office is like another construction company. One ingredient of a prudent start-up is to relocate a top person from your trusted pool.